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Apparel maker Cantabil retail is soon to float its IPO to raise more funds for expansion.
How did Cantabil enter the retail sector?
In the year 2000, we started our retail journey by launching the Cantabil brand and opened first store in Delhi. In the last 10 years, Cantabil has become a complete family wear brand with addition of women's wear segment in 2007 and kidswear segment in 2008. We launched our second brand La FANSO in 2008. We are also retailing accessories like ties, belts, socks, caps and handkerchief under our brands.
How many exclusives stores do you have and how many of them are franchised?
As on August 31, 2009, the company had 381 exclusive retail outlets. Today, the ratio of company-owned and franchised stores is 50:50.
How many exclusive stores do you plan in the next two years? Which are your target cities for expansion?
We have plans to add another 180 stores by March 2011. We have huge presence and strong foothold in northern and western part of the country, which we want to consolidate further. We would like to expand further in central, eastern and southern region of the country.
Does the franchisee needs to buy stock? How do you deal with the leftover stocks?
Presently, under the franchisee model, we have two different forms, outright sale and consignment sale. In outright sale model, the company sells the stock to franchisee. In consignment model, the company transfers the stock to the franchisee. The stock left at the end of season is cleared out by providing additional discounts and schemes to customers. If the stock is there even after such discounts, it is sent back to the company warehouse, from where it is sent to different locations, depending upon the requirement of the showroom and customers.
What are the area and investment requirements for a franchisee?
The size of the store varies from market to market and city to city. However, the general size the company prefers for its brands ranges from 600 to 800 sq.ft under the studio category and 800 to 1,500 under the large format and 3,000 sq.ft and above under the family wear category. Investment requirements are varied and depend on the location of the showroom.
What training and support does a franchisee get while partnering with you?
Once a franchisee is selected, our regional sales manager/area sales manager brief him about the functioning of the showroom, how to deal with customers, etc. We provide training to the franchisee and his staff on how to operate, manage and run the software. Our IT employees personally visit the showroom to make them understand all the technicalities involved in operating the system.
What is your manufacturing base?
Presently, we have three in-house manufacturing/finishing units and four warehouses located in Delhi. We also have a three third party dedicated units manufacturing exclusively for us. We have fabricating arrangements with 94 manufacturing units to which we outsource cutting and stitching.